The Financial Industry Regulatory Authority (FINRA) announced that MetLife Securities Inc. agreed to a $20 million fine and $5 million in restitution for misleading customers over variable annuity sales. This is the largest FINRA fine related to variable annuities. FINRA accused MetLife of omitting or misrepresenting material facts about customers’ existing variable annuities in nearly 75% of the variable annuity replacement applications it approved between 2009 and 2014. Brokers can receive very large commissions for selling variable annuities, which can entice brokers to recommend that customers liquidate annuities that they own and buy new variable annuities, which would generate a new commissions for the brokers.
According to FINRA, the improper sales practices caused replacement annuities to appear more attractive than annuities that customers held, even though the new annuities typically were more expensive or eliminated important features like guaranteed income benefits.
Brokers and brokerage firms are obligated to provide full and fair disclosure about investments that they recommend. With regard to variable annuities, it can be difficult for customers to understand and compare complex variable annuity contracts. As a result, many investors place their trust in their brokers to recommend suitable investments and to provide honest assessments of investment choices. Unfortunately, some brokers abuse their customers’ trust and some brokerage firms fail to properly supervise their brokers.
Were you sold a variable annuity by a MetLife Broker?
If your MetLife broker sold you a variable annuity as a replacement for an annuity that you already owned, contact our investment fraud lawyers for a free case evaluation. You may have a FINRA arbitration claim against MetLife for unnecessary costs incurred. The attorneys at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions. Contact us to schedule an appointment or consultation today.